Ann: Mesoblast Phase 3 Chronic Heart Failure Results, page-573

Folklore has it that there has never been a successful P3 trial result when based on a post-hoc sub-group analysis in P2.

And so there you go – just as expected; the P2 CHF post-hoc sub-group analysis lacked positive predictive power just as many people had argued over the years.

Add big pharma partner (Teva) walking at the first chance they had and the sister trial that was supposed to be occurring in parallel to this trial being abandoned and it seems obvious this trial never had a chance.

Now of-course this is with Harry Hindsight. And MSB wrong-footed me here yet again. My back of the envelope calculations were far off the mark.

For either Back / CHF (which ever dropped first) I had.

Upside reward share price of $9.00 and a downside risk for bad news $3 share price. Use a starting share price of $4.70. So risk reward 2.59 with a minimal win rate to be profitable of 28%. So around a third probability of success.

Turns out the downside risk was not $3; closer to 4$. Hence the market was pricing a much lower probability of success than I had imagined. Getting way too soft-headed.

Now the funny thing is … if there is a funny thing … is that the very people who believed the P2 trial results proved the treatment worked now believe the P3 trial results prove the treatment saves lives.

That is there is no distinction whatsoever between confirmatory versus an exploratory trial results. Everything is always true; especially with a good p value. Even a single arm trial where you don’t have actually have a historical control group based on historical group modelling.

And so therefore the idea that the back trial could be in a little bit of trouble … because you have a retro-fitted post-hoc outcome – in the context of a responder analysis (which are often thought to be work of the devil) in P2 is inconsequential.

Because even if the primary fails … something else good might pop along. You mine for silver and you discover gold. How good is that as Scomo would say.

It’s a happy place. Need a trip there myself. Reality is just full of short-sighted dumb people.